A bankruptcy is designed to help you get out from under your debts. In a Chapter 7 bankruptcy, the trustee cancels many of the debts. You may have to liquidate some property to repay your creditors, which is why a Chapter 7 is often referred to as a liquidation bankruptcy. In a Chapter 13 bankruptcy, your debts are "reorganized." You pay debts in a plan over three to five years. Which bankruptcy is right for your situation depends on a number of factors, such as the amount of debt you have and your income.
When you are considering bankruptcy, you are probably stressed and worried about what will happen to your house, your car and your income should you go that route. Not all debts are dischargeable. According to the U.S. Bankruptcy Court, you cannot discharge these types of debts:
The owners of a bridal shop in Florida closed their shop in March and then filed for Chapter 7 bankruptcy on April 6. Victoria's Bridal Couture, located on Las Olas Boulevard in Fort Lauderdale, was almost $500,000 in debt when the owners submitted the bankruptcy filing. According to bankruptcy documents, the bridal shop owes money to 927 people and suppliers.
As many of our Florida readers know, we have often spoken about how credit card debt can lead to bankruptcy if the credit cards aren't properly managed or if a life event changes the borrower's ability to pay. It seems that Americans are once again embracing the willingness of credit card companies and banks to lend them money. The average credit card balance increased in 2014 by 5.9 percent nationally, but the increase in the Miami-Fort Lauderdale area was higher.
As most of our readers know, credit card debt, auto loans and medical bills are what lead many people to file bankruptcy. Before people file for bankruptcy, they often have to deal with the creditors' attempts to collect on the debts. Dealing with those creditors can prove to be very challenging for some people. We don't want any of our Miami neighbors to have to deal with the stress of dealing with creditors.
Florida residents who are juggling bills maybe interested in learning what the top three sources are for the debts accrued by American families. According to statistics provided by the Federal Reserve, in 2014 the top three debt sources were:
Miami residents struggling to stay above water with their finances may glean some useful information from these common consumer questions. Read on if you are considering a mortgage modification.
Miami residents who decide to file for Chapter 7 bankruptcy often mistakenly believe that all of their debts will be discharged. However, not all debts are discharged in a bankruptcy.
With the holiday season right around the corner, it is easy to overspend and end up in serious debt. Last week, we talked about how credit card debt can wreck havoc on your life. We discussed some ways to rein in holiday spending. Some of our Florida readers might be past the point of reigning in holiday spending. Those readers might be contemplating bankruptcy. Chapter 7 bankruptcy is one option that is on the table for some people. This type of bankruptcy has some very specific points that you must consider prior to filing.
Florida debtors who have decided to file for Chapter 7 bankruptcy proceedings must usually pass a standardized, objective test called the Bankruptcy Means Test. This became the new standard after the the Bankruptcy Protection Act of 2005 was passed by Congress to tighten the criteria for filing consumer bankruptcy.